Mass. Horse Farm Charged with Workers’ Comp Premium Fraud

Update: On Nov. 3, 2008, Christopher Mersereau and his corporation, Stoneymeade Farm LLC, located in Concord, Mass., entered into an agreement with the office of Attorney General Martha Coakley resolving charges originally reported in the story below. Under the terms of the agreement, Mersereau was to pay restitution in the amount of $2,500 to St. Paul’s Travelers’ Insurance Co., and was to operate a free therapeutic riding program for children with disabilities at Stoneymeade Farm for five years.

A Middlesex Grand Jury has indicted a Concord, Mass. man and the horse farm that he jointly owns for providing inaccurate information and withholding information from his insurer in order to avoid payment of workers’ compensation insurance premiums, according to the state attorney general.

Christopher Mersereau, and his corporation, Stoneymeade Farm LLC, located in Concord, have each been charged with workers’ compensation insurance fraud and larceny over $250.

The Attorney General’s Office said it began an investigation in 2006 after the matter was referred by the Insurance Fraud Bureau of Massachusetts (IFB). Officials said the investigation revealed that in November 2003, an employee of the farm sustained injuries when a large bale of hay fell on his head and shoulders. The injured employee filed a workers’ compensation claim with the company’s insurance carrier, St. Paul/Travelers Insurance Co. While processing the claim, St. Paul/Travelers learned that the injured employee was paid wages partly by check, but mostly in cash by Mersereau. Investigators said they also discovered that other farm employees were paid by check and in cash, but that Mersereau never disclosed the cash portion of the farm’s payroll to St. Paul/Travelers. Gross payroll, whether paid by check or in cash, is a component in workers’ compensation premiums.

As a result of the allegedly fraudulent payroll scheme, Mersereau defrauded the insurer of nearly $10,000 in workers’ compensation insurance premiums from November 2002 through November 2004, according to officials. St. Paul/Travelers also had to pay workers’ compensation benefits to the injured employee based on the total wages he received in checks and cash.

After St. Paul/Travelers and the IFB discovered the fraud, thei said that Mersereau amended the farm’s state and federal tax filings to include cash wage payments made by the farm to its employees. However, officials charge, Mersereau never amended the representations he made to the insurance auditor and never corrected the payroll information that he disclosed at the audit or in the wage statement he submitted to St. Paul/Travelers.

A Middlesex Grand Jury returned indictments against Mersereau on Jan. 3. He is scheduled to be arraigned in Middlesex Superior Court on Jan. 24.

Source: Mass. Attorney General’s Office